31/01/2013 by Keith Brown, MD at Paythru
Very interesting Report from PSE this week ("The High Cost of Interchange Complexity"). The Interchange system is complex and bewildering to most merchants and it's no wonder many are over paying for transactions. With new payment "types” emerging (NFC, mobile etc) this situation will only become more perplexing.
No surprise then that there is increasing interest from merchants in (white label) wallet products which can offer operational simplicity, more transparent pricing and potentially lower costs.
But there is another significant issue here&hellipl; as the consumer demands more commercial functionality from their smartphone and/or tablet and more "off-line" (i.e. by which I mean that which is currently classed as point-of-sale) activity shifts to the on-line channel to support this demand, merchants will find themselves in a premium interchange pricing zone! Adding further to transactional cost and accounting confusion.
The challenge is to enable the consumer to transact omni-channel whilst reducing the cost and reconciliation burden for merchants.